Which means a lot of Obama voters — people that bought into Obama’s “soak the rich” rhetoric — who have been able to deduct the first $2,500 of student loan interest from their federal income taxes — are going to lose that deduction if they are more than five years into their loans.
Since they introduced this deduction, I’ve always been above the income cap for being able to take it. With a sharp income reduction in this era of hope and change, this year I’d probably be able to take it… and now it may go away.
I think I’m part of the generation that’s always going to find themselves paying for all this wonderful government, but never actually benefitting from any of it.
Our generation is caught between two entitled generations. We’ll be paying until we are dead.
We have done this to ourselves. Republicans have certainly done their share of increasing entitlement programs over the years. We, all of us, vote these people into office. I fear sooner rather than later we are heading for a Spain or Greek-like economic crisis.
I truly wanted to fully retire at 66.5 years. I don’t see that happening now. How sad is that, work for 50 years, play by the rules, max out on 401 K matching and still have to have a full time job at 66. I feel like I have been analy raped with a thorny cactus.
I think you younger guys are in the process of learning an eternal truth.
As a very early Baby Boomer (actually I’m not; I was born a few weeks too early) I’ll acknowledge that my timing was pretty good, and I can’t say that doing what was supposed to be The Right Thing didn’t pay off. But we too had the experiences of, e.g., electing people who promised and were lauded for “tax cuts,” and finding that our tax bills went up in terms of taxes paid as a percentage of our gross incomes. Gee, what went on there?
The eternal truth is that politics and ideology is about talking you into giving up things voluntarily, and/or not recognizing it after they’re gone; while you curse and attack everyone who didn’t surrender voluntarily.
Danny’s 401(k) example is probably a good one. I have yet to absorb all of the statistics, but much of the middle class has been annihilated by them, while industry profited hugely from the abandonment of guaranteed benefit pensions. So too did money managers who profited from churning a market that had more small investors participating than they had ever dreamed of.
The problem is that “defined benefit” pensions are not really guaranteed. Sure, if the company stays in business and is sufficiently profitable (sometimes the latter is simply impossible, like Government Motors), you’ll get a nice pension. There’s also an “independent” government agency that’s supposed to cover for those companies that can’t, the Pension Benefit Guaranty Corporation, but it frequently pays less than the “defined” benefit and it’s of course in deficit, it turns out (Wikipedia again) that “The PBGC regularly updates its investment strategy. In 2004, it chose to invest heavily in bonds. Under new leadership, the agency in 2008 shifted a substantial portion of its assets into stocks. Because of the market decline, PBGC’s equity investments lost 23% during the year ending September 30, 2008.“.
And guess what? A whole lot of those defined benefit programs also invested their money in instruments that went down in the financial crisis, they’re hardly more immune than individual 401Ks. Except the individual has absolutely no control over the former.
And with a effectively permanent government policy of zero percent interest rates (makes financing “trillion dollar deficits as far as the eye can see” cheap) a large fraction of the elderly are getting harmed.
Bottom line, impossible to meet promises were made all over the place, and people are going to get a lot less than they thought they would. Those who decided to depend on the government, even to maintain the value of money, vs. the old fashioned depend on your family or other parts of civil society, are or will be in for a rude awakening.
I just got the paper work for next years health savings plan. The amount was 3,500 this year, next year is only 2,500. Somebody’s got to pay for obozzo care.
Yes, previously your employer could set any limit, Obamacare for 2013 has capped it at $2,500.
Giving people control over how they spend their dollars for medical care is entirely anti-ethical to Obamacare, which after all is premised on the conceit that we spend too much as it is. Of course, it’s so messed up we’ll probably end up spending an even higher % of GDP for less care.
Given the increased cost and complexity of “Wonderful Government” I don’t think anybody but the .Gov-drones and Politburo actually benefit from any of it.
Thanks to Obamanomics, I am now on the honey bees’ retirement plan—work until you die.
I suspect the summer and fall of 2014 will be interesting. More than a few of Obama’s best buds won’t discover the 1/1/2013 economic impact until tax time in April 2014.
The one thing I am thankful for is that my grandchildren WILL NOT have to deal with this stupid government.
:-(
The only “good” part about my being disabled is I’m actually getting something back out of the money I paid in for years while working.
Sadly many others probably will never get a dime back out of the system.
The paradoxical part is even though I live off of Social Security, I want it changed or eliminated, as I believe it is an Un-Constitutional program.
Honest question: What would you do if it were eliminated?
The biggest problem, that makes socialist programs immune to dying before they have killed their host is, that the vast majority of honest people, who don’t intend to become leeches or moochers, do in fact become dependent on them. If they were ended there would be countless examples of innocent people who would suffer horribly as a result. Who then has the political will to say, tough shit? Who could survive politically, in a representative democracy, if they did that?
I am presently handling the affairs of an elderly person who has become penniless and is going on Medicaid. They were solidly middle class, and while I could fault one or two trivial things they did financially in the course of their life, all those things did was speed up their status as paupers by perhaps six months. They simply made the mistake of living too long, after their cost of being kept alive exceeded their monthly income from pensions and social security.
I don’t know what you do about that. I do know the thing that won’t be happen, constitution or no, is a consensus for throwing them in the street be arrived at. At least until we reach a state of raw, every-man-for-himself survival.
Sorry — just thinking out loud those thoughts that haunt me when I wake up at 2:00 AM.
I don’t think there’s an easy way out. People who planned for will likely get their benefit. The young are going to have to pay for it, and save for their own retirement. I don’t know anyone under 40 who expects Social Security and Medicare to be there for them, and most of us are becoming resigned to the idea that retirement at 65 is a thing of the past.
For me, I expect to keep working, and probably prefer it. But I’d likely need a career change, because at some point in a tech field I’m going to have a hard time keeping up with the kids, so to speak. If I end up doing well for myself between now and then, I might go get a law degree and then represent people for a low fee, or pro-bono, in civil rights cases. I suppose my ideal retirement would be to spend my waning years suing the government. I think that would be satisfying.
Not all fed workers are getting rich. My wife works for the VA as a gs-8. She has a 401k type retirement account that has technically been raided twice by the treasury not making matching payments. We don’t believe we will see any of the money when she retires in a few years.
A lot of people place greater value on Federal Civil Service employment because of its job security. Although of course as GS-8, which Wikipedia says is one grade above “entry level”, your wife isn’t “getting rich”, although how much are people in the private sector who do her sort of work getting?
The general issue is with average compensation, which is Microsoft scale, twice the average private compensation. Slightly less than a year ago it was $75K of salary, with a 76% benefits rate bringing total compensation to $133,000.
That’s not “getting rich” either, but most of us consider it to be pretty serious compensation.